Carlsberg plunges into the red - UK

London - Danish brewer Carlsberg said that Wednesday it plunged into the red in 2015 because of large restructuring provisions and declining sales in Europe amid a shrinking Russian beer market.

The group reported a net loss of 2.6 billion kroner (346 million euros, $392 million) for last year, compared to a net profit of 4.9 billion kroner a year earlier.

Carlsberg announced in November it was cutting 2 000 white-collar jobs, or around 15 percent of its workforce, to address its woes, affecting primarily Russia, China, and Britain.

Around 1 700 people have already left the company or will do so shortly.

The brewer registered restructuring provisions of 8.5 billion kroner (compared to exceptional items of 1.3 billion in 2014) in 2015, out of a total of 10 billion kroner worth of restructuring charges and reductions in the value of its assets forecast until 2017.

Much of the charges were due to Carlsberg's Baltika brewery, the largest beer maker in Russia, where the beer market has gone flat after the government took measures to tackle alcoholism, including a crackdown on marketing and banning the sale of beer in kiosks and late at night.

Carlsberg has reduced production capacity at four sites and cut hundreds of jobs there.

“Savings are fully on track,” Carlsberg said in a statement.

In China, the brewer shut five breweries last year and two more since the start of this year.

Moreover, in Britain, where the group recently ended a distribution deal with Tesco, negotiations are underway with unions.

The group's sales inched up last year by 1.3 percent to 65.3 billion kroner, as volumes fell by 1.0 percent.

Chief executive Cees't Hart admitted 2015 had been “a mixed year” for the group, with declines in its premium market Europe, while Asia posted robust earnings.

“As a consequence of the strong Asian results, however, 2015 marked the inflection point when the growth markets of Asia accounted for a larger part of the group than Eastern Europe,” it said.

The positive impact of acquisitions in China and Greece were “more than offset by the negative currency impact from the weakness of the Russian and Ukrainian currencies, in turn partly offset by stronger Asian currencies,” it said.

“The Carlsberg brand continued to deliver growth in Asia but declined in Western and Eastern Europe as a result of the overall market decline and (cyclical comparison difficulties) due to the World Cup in 2014,” an event that generates significant revenues for the football sponsor, the brewer said.

Related News

#WomensMonth: The art of brewing with a woman’s touch19/08/2019 - 13:36SAB which boasts 57% of women brewers in South Africa, believes Women’s Month provides the perfect opportunity for our country to reflect on how far we have come in changing the perception of women and beer. Since prehistoric times, the important responsibility of brewing beer was almost always undertaken by women in a community, but since the industrial revolution in the 18th Century, it has become more of a male-dominated industry. Now is the time for women to take their power back and reassume their rightful place as society’s leading brewmasters.

SA's best-loved beers revealed at Sunday Times Lifestyle Beer Awards 05/08/2019 - 14:24CBC Amber Weiss was officially announced as South Africa’s Most Loved Beer at the Sunday Times Lifestyle Beer Awards in partnership with Makro on 2 August 2019, at an event in Johannesburg to celebrate the creators and retailers of local and internationally crafted beers.